The economic impact of the Fairfax, Hominy, and Newkirk community health centers

The Economic Impact of the
Fairfax, Hominy, and Newkirk Community Health Centers
Hospitals Nursing Homes
Physicians, etc. Other Services Pharmacies
Oklahoma State Department of Health
Office of Rural Health
Oklahoma Cooperative Extension Service
Oklahoma State University
April 2010
AE-10006
The Economic Impact of the
Fairfax, Hominy, and Newkirk Community Health Centers
Community Health Engagement Process documents available online at:
www.okruralhealthworks.org
Lara Brooks, Assistant Extension Specialist, OSU, Stillwater
Phone: 405-744-6083, Fax: 405-744-9835, Email: lara.brooks@okstate.edu
Brian Whitacre, Assistant Professor and Extension Economist, OSU, Stillwater
405-744-6083
Jack Frye, Area Extension Rural Development Specialist, OSU, Ada
580-332-4100
Stan Ralstin, Area Extension Rural Development Specialist, OSU, Enid
580-237-7677
Richard Rexwinkle, Osage County Extension Director, Pawhuska
918-287-4170
Larry Klump, Kay County Extension Directory, Newkirk
580-362-3194
Corie Kaiser, Health Consultant, Oklahoma Center for Rural Health, Oklahoma City
405-945-9197
Val Schott, Director, Oklahoma Center for Rural Health, Oklahoma City & Tulsa
405-945-9197
Oklahoma State Department of Health
Office of Rural Health
Oklahoma Cooperative Extension Service
Oklahoma State University
April 2010
1
The Economic Impact of the
Fairfax, Hominy, and Newkirk Community Health Centers
Medical facilities have a tremendous medical and economic impact on the community in
which they are located. This is especially true with health care facilities, such as community
health centers. These facilities not only employ a large number of people and have a significant
payroll, but they also draw a large number of people from rural areas that need medical services
into the community. The overall objective of this study is to measure the economic impact of the
health sector on the Fairfax, Hominy, and Newkirk Community Health Centers on the areas that
they serve. The specific objectives of this report are to:
1. Review economic trends of the health sector for the U.S. and Osage and Kay
Counties;
2. Identify population for the medical service area of Fairfax, Hominy, and Newkirk
Community Health Centers;
3. Summarize the direct economic activities of the community health centers;
4. Review concepts of community economics and multipliers; and
5. Estimate the secondary and total impacts of the Fairfax, Hominy, and Newkirk
Community Health Centers.
No recommendations will be made in this report.
Health Services and Rural Development
The nexus between health care services and rural development is often overlooked. At
least three primary areas of commonality exist. A strong health care system can help attract and
maintain business and industry growth, and attract and retain retirees. A strong health care
system can also create jobs in the local area. The following section looks at how the health care
sector impacts these areas.
2
Services that Impact Rural Development
Type of Growth Services Important to Attract Growth
Industrial and Business Health and Education
Retirees Health and Safety
Business and Industry Growth
Studies have found that quality-of-life (QOL) factors are playing a dramatic role in
business and industry location decisions. Among the most significant of the QOL variables are
health care services, which are important for at least three reasons.
First, as noted by a member of the Board of Directors of a community economic
development corporation, the presence of good health and education services is imperative to
industrial and business leaders as they select a community for location. Employees and
participating management may offer strong resistance if they are asked to move into a
community with substandard or inconveniently located health services.
Secondly, when a business or industry makes a location decision, it wants to ensure that
the local labor force will be productive, and a key factor in productivity is good health. Thus,
investments in health care services can be expected to yield dividends in the form of increased
labor productivity.
The cost of health care services is the third factor that is considered by business and
industry in development decisions. Research shows that corporations take a serious look at
health care costs in determining site locations. Sites that provide health care services at a lower
cost are given higher consideration for new industry than sites with much higher health care
costs.
3
Health Services and Attracting Retirees
A strong and convenient health care system is important to retirees, a special group of
residents whose spending and purchasing can be a significant source of income for the local
economy. Many rural areas have environments (e.g., moderate climate and outdoor activities)
that enable them to be in a good position to attract and retain retirees. The amount of spending
embodied in this population, including the purchasing power associated with Social Security,
Medicare, and other transfer payments, is substantial. Additionally, middle and upper income
retirees often have substantial net worth. Although the data are limited, several studies suggest
health services may be a critical variable that influences the location decision of retirees. For
example, one study found that four items were the best predictors of retirement locations: safety,
recreational facilities, dwelling units, and health care. Another study found that nearly 60
percent of potential retirees said health services were in the “must have” category when
considering a retirement community. Only protective services were mentioned more often than
health services as a “must have” service.
Health Services and Job Growth
A factor important to the success of rural economic development is job creation. The
health care sector is an extremely fast growing sector, and based on the current demographics,
there is every reason to expect this trend to continue. Data in Table 1 provide selected health
expenditures and employment data for the United States. Several highlights from the national
data are:
􀂃 In 1970, health care services as a share of the national gross domestic product (GDP)
were 7.2 percent. This increased to 16.2 percent in 2007;
􀂃 Per capita health expenditures increased from $356 in 1970 to $7,421 in 2007;
4
􀂃 Employment in the health sector increased almost 324.0 percent from 1970 to 2007;
and
􀂃 Annual increases in employment from 2003 to 2007 ranged from 2.0 percent to 2.7
percent.
In addition, the Bureau of Labor Statistics projects substantial increases in health care
expenditures from 2009 through 2018. In fact, the U. S. Department of Health and Human
Services, Centers for Medicare and Medicaid Services predict that health care expenditures will
account for 18.9 percent of GDP by 2015 and increase to 20.3 percent of GDP in 2018. Per
capita health care expenditures are projected to increase to $10,929 in 2015 and to $13,100 in
2018. Total health expenditures are projected to increase to almost $4.4 trillion in 2018.
5
Table 1
United States Health Expenditures and Employment Data
1970-2008; Projected for 2009, 2012, 2015 & 2018
Total Per Capita Health Health Ave. Annual
Year Health Health as % Sector Increase in
Expenditures Expenditures of
GDP
Employment Employment
($Billions) ($) (%) (000) (%)
1970 $74.9 $356 7.2% 3,052 a
1980 253.4 1,100 9.1% 5,278 a 7.3%
1990 714.1 2,814 12.3% 7,814 a 4.8%
2000 1,352.9 4,789 13.6% 10,858 a 3.9%
2001 1,469.2 5,150 14.3% 11,188 a 3.0%
2002 1,602.4 5,564 15.1% 11,536 a 3.1%
2003 1,735.2 5,973 15.6% 11,817 b N/A
2004 1,855.4 6,328 15.6% 12,055 b 2.0%
2005 1,982.5 6,701 15.7% 12,314 b 2.1%
2006 2,112.5 7,071 15.8% 12,602 b 2.3%
2007 2,239.7 7,423 15.9% 12,946 b 2.7%
2008 2,338.7 7,681 16.2% 13,469 b 4.0%
Projections
2009 2,509.5 8,160 17.6%
2012 2,930.7 9,282 18.0%
2015 3,541.3 10,929 18.9%
2018 4,353.2 13,100 20.3%
SOURCES: Bureau of Labor Statistics (www.bls.gov [January 2010]); 2010 Centers for Medicare &
Medicaid Services, National Health Expenditures 1970-2008 and National Health Expenditure Projections
2008-2018 (http://www.cms.hhs.gov/nationalhealthexpenddata [January 2010]).
N/A - Not Available.
a Based on Standard Industrial Classification (SIC) codes for health sector employment.
b Based on North American Industrial Classification System (NAICS) for health sector employment.
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7
Osage and Kay Counties Economic Trends
Data relative to the health sector for Osage and Kay Counties are provided in Tables 2a
and 2b. Data in Tables 2a and 2b are from the U. S. Census Bureau County Business Patterns,
based on the North American Industry Classification System (NAICS). The table is based on
employment and payroll for both health services and total county services and health services as
a percent of total county services for Osage and Kay Counties. Also, health services for the state
of Oklahoma are illustrated as a percent of total state employment and payroll for comparison to
the county data. This table states how health services have changed over time. Health services
employment in Osage County increased 9.8 percent from 614 employees in 2000 to 674
employees in 2007 (Table 2). During the same time period, the total county employment also
increased 23.9 percent. County health services employment as a percent of total county
employment decreased from 14.5 percent in 2000 to 12.9 percent in 2007, while the state health
services employment as a percent of total state employment increased from 14.1 percent in 2000
to 15.3 percent in 2007. The county saw a decrease of 1.6 percent over this seven year period,
while the state grew by1.2 percent.
The county health services payroll experienced significant increases over time. Osage
County’s health services payroll increased 24.8 percent from about $9.2 million in 2000 to about
$11.4 million in 2007; this compares to an increase of 56.8 percent for the total county payroll
(Table 2a). During this same time period, the state health services payroll increased from 14.0
percent to 15.3 percent. County health services payroll as a percent of total county payroll
decreased from 10.9 percent in 2000 to 8.7 percent in 2007.
Kay County experienced a 13.6 percent increase in healthcare employment from 2000 to
2007. However, total county employment experienced a decrease of 10.1 percent during the
8
same time period. Health services employment as a percent of total county employment
increased 2.7 percent from 2000 to 2007 (Table 2b). Kay County healthcare payroll also
experienced an increase of 30.3 percent from nearly $44.7 million in 2000 to $58.2 million in
2007. Kay County total county payroll increased 12.4 percent during the same time period.
Health services payroll as a percent of total county payroll increased 1.5 percent which is greater
than the state (1.3 percent) (Table 2b). These numbers all suggest that in total, the health sector
is very important to the economies of Osage and Kay Counties. Later in this report, we will
quantify the role that the community health centers have played in benefitting the economy.
9
Table 2a
Fairfax and Hominy Community Health Centers
Employment and Payroll for County Business Patterns*
Osage County and the State of Oklahoma
Employment
Based Health Total Hlth Svcs as a Hlth Svcs as a
on Services County % of Total % of Total
NAICS1 Employment Employment
County
Employment
State
Employment
2000 614 4,233 14.5% 14.1%
2001 647 4,117 15.7% 14.3%
2002 679 3,413 19.9% 15.1%
2003 626 3,420 18.3% 15.2%
2004 622 3,318 18.7% 15.4%
2005 528 3,521 15.0% 15.4%
2006 571 4,256 13.4% 15.1%
2007 674 5,243 12.9% 15.3%
% Change '00 - '07 9.8% 23.9%
Payroll
Based Health Total Hlth Svcs as a Hlth Svcs as as
on Services County % of Total % of Total
NAICS1
Payroll
($1000s)
Payroll
($1000s) County Payroll State Payroll
2000 $9,153.00 $84,005.00 10.9% 14.0%
2001 $10,304.00 $84,224.00 12.2% 14.5%
2002 $10,047.00 $61,635.00 16.3% 15.2%
2003 $9,816.00 $64,841.00 15.1% 15.2%
2004 $10,327.00 $66,194.00 15.6% 15.7%
2005 $9,845.00 $79,664.00 12.4% 15.5%
2006 $11,328.00 $97,710.00 11.6% 15.1%
2007 $11,423.00 $131,729.00 8.7% 15.3%
% Change '00 - '07 24.8% 56.8%
Source: U.S. Census Bureau, County Business Patterns; 2000-2007 data (www.census.gov [April 2010]).
1 The Health Care and Social Assistance NAICS sector comprises establishments providing health care and social assistance for individuals.
The sector includes both health care and social assistance because it is sometimes difficult to distinguish between the boundaries of these two
activities. Industries in this sector are arranged on a continuum starting with those establishments providing medical care exclusively,
continuing with those providing health care and social assistance, and finally finishing with those providing only social assistance. The
services provided by establishments in this sector are delivered by trained professionals. All industries in the sector shared this commonality
of process, namely, labor inputs of health practitioners or social workers with the requisite expertise. Many of the industries in the sector are
defined based on the educational degree held by the practitioners included in the industry.
* Data from County Business Patterns exclude self-employed persons, employees of private households, railroad employees, agricultural
production workers, and for most government employees (except for those working in wholesale liquor establishments, retail liquor stores,
Federally-chartered savings institutions, Federally-charted credit unions, and hospitals).
10
Table 2b
Newkirk Community Health Center
Employment and Payroll for County Business Patterns*
Kay County and the State of Oklahoma
Employment
Based Health Total Hlth Svcs as a Hlth Svcs as a
on Services County % of Total % of Total
NAICS1 Employment Employment County Employment
State
Employment
2000 1,914 18,433 10.4% 14.1%
2001 1,847 18,268 10.1% 14.3%
2002 2,325 18,922 12.3% 15.1%
2003 2,232 16,172 13.8% 15.2%
2004 1,960 16,140 12.1% 15.4%
2005 2,190 17,238 12.7% 15.4%
2006 2,183 17,265 12.6% 15.1%
2007 2,175 16,576 13.1% 15.3%
% Change '00 - '07 13.6% -10.1%
Payroll
Based Health Total Hlth Svcs as a Hlth Svcs as as
on Services County % of Total % of Total
NAICS1
Payroll
($1000s)
Payroll
($1000s) County Payroll State Payroll
2000 $44,692.00 $481,024.00 9.3% 14.0%
2001 $45,527.00 $529,319.00 8.6% 14.5%
2002 $50,895.00 $544,562.00 9.3% 15.2%
2003 $50,821.00 $432,722.00 11.7% 15.2%
2004 $50,443.00 $479,879.00 10.5% 15.7%
2005 $55,404.00 $552,196.00 10.0% 15.5%
11
2006 $58,503.00 $581,781.00 10.1% 15.1%
2007 $58,230.00 $540,621.00 10.8% 15.3%
% Change '00 - '07 30.3% 12.4%
Source: U.S. Census Bureau, County Business Patterns; 2000-2007 data (www.census.gov [April 2010]).
1 The Health Care and Social Assistance NAICS sector comprises establishments providing health care and social assistance for individuals. The
sector includes both health care and social assistance because it is sometimes difficult to distinguish between the boundaries of these two activities.
Industries in this sector are arranged on a continuum starting with those establishments providing medical care exclusively, continuing with those
providing health care and social assistance, and finally finishing with those providing only social assistance. The services provided by establishments
in this sector are delivered by trained professionals. All industries in the sector shared this commonality of process, namely, labor inputs of health
practitioners or social workers with the requisite expertise. Many of the industries in the sector are defined based on the educational degree held by
the practitioners included in the industry.
* Data from County Business Patterns exclude self-employed persons, employees of private households, railroad employees, agricultural production
workers, and for most government employees (except for those working in wholesale liquor establishments, retail liquor stores, Federally-chartered
savings institutions, Federally-charted credit unions, and hospitals).
Basic economic indicators of the Osage County and Kay County economy are illustrated in Tables 3a and 3b. Based on
Bureau of Economic Analysis data, the 2007 per capita income for Osage County of $30,350 is lower than the per capita income for
the state of Oklahoma and the United States. The per capita income for Kay County was $33,621 which was also lower than
Oklahoma and the United States (Table 3b).
Table 3a
Economic Indicators for Osage County,
the State of Oklahoma and the Nation
Indicator County State U.S.
Total Personal Income (2007) $1,378,877,000 $126,272,950,000 $11,634,322,000,000
Per Capita Income (2007) $30,350 $34,997 $38,615
Employment (2008) 19,291 1,681,854 145,362,000
Unemployment (2008) 854 66,562 8,924,000
12
Unemployment Rate (2008) 4.2% 3.8% 5.8%
Employment (February 2010) 18,530* 1,638,235 137,203,000
Unemployment (February 2010) 1,737* 128,660 15,991,000
Unemployment Rate (February 2010) 8.6%* 7.3% 10.4%
Percentage of People in Poverty (2008) 13.1% 15.7% 13.2%
Percentage of Under 18 in Poverty (2008) 19.8% 22.0% 18.2%
Transfer Dollars (2007) $233,524,000 $21,218,050,000 $1,712,794,000,000
Transfer Dollars as Percentage of 16.9% 16.8% 14.7%
Total Personal Income (2007)
*Employment data for Osage County for February 2010 should be considered preliminary
SOURCES: 2010 Bureau of Labor Statistics; 2010 Bureau of Economic Analysis; 2010 U.S. Census Bureau.
Table 3b
Economic Indicators for Kay County,
the State of Oklahoma and the Nation
Indicator County State U.S.
Total Personal Income (2007) $1,536,853,000 $126,272,950,000 $11,634,322,000,000
Per Capita Income (2007) $33,621 $34,997 $38,615
13
According to the Bureau of Labor Statistics, the unemployment rate for Osage County was 4.2 percent for 2008, which was the
higher than the state (3.8 percent) but lower than the national (5.8 percent) rates. Kay County experienced a similar trend of a 3.6
percent unemployment rate which was lower than both the state and the nation. Moreover, in February 2010, the preliminary
unemployment rate estimate for Osage County had increased to 8.6 percent, which was higher than the state (7.3 percent) but lower
than the nation (10.4 percent). Preliminary estimates for Kay County indicate that the unemployment rate has increased to 9.2 percent
in February. This places Kay County above the state rate and below the national unemployment rate. However, the number of people
employed in Osage County decreased 4 percent from 2008 to February 2010, while the number of people unemployed increased 103
Employment (2008) 23,816 1,681,854 145,362,000
Unemployment (2008) 857 66,562 8,924,000
Unemployment Rate (2008) 3.6% 3.8% 5.8%
Employment (February 2010) 21,288* 1,638,235 137,203,000
Unemployment (February 2010) 2,146* 128,660 15,991,000
Unemployment Rate (February 2010) 9.2%* 7.3% 10.4%
Percentage of People in Poverty (2008) 17.2% 15.7% 13.2%
Percentage of Under 18 in Poverty (2008) 26.0% 22.0% 18.2%
Transfer Dollars (2007) $305,450,000 $21,218,050,000 $1,712,794,000,000
Transfer Dollars as Percentage of 19.9% 16.8% 14.7%
Total Personal Income (2007)
*Employment data for Kay County for February 2010 should be considered preliminary
SOURCES: 2010 Bureau of Labor Statistics; 2010 Bureau of Economic Analysis; 2010 U.S. Census Bureau.
14
percent during that same time period. The number of people employed in Kay County decreased 11 percent during the same time
period, and the number of unemployed increased 150 percent. The unemployment and employment estimates from February 2010 are
considered preliminary.
From the U. S. Census Bureau, the percent of people in poverty in Osage County was 13.1 percent in 2008, as compared to
15.7 percent for the state and 13.2 percent nationally. The percentage of people under age 18 in poverty in 2008 followed similar
trends, with Osage County being lower than both the state but higher than the nation. The percentage of people in poverty in Kay
County was 17.2 percent which is higher than both the state and the nation, and the percentage of people under the age of 18 in
poverty was 26.0 percent which is also higher than both the state and the nation as well. Another economic indicator is the percent of
personal income that is from transfer payments. Based on Bureau of Economic Analysis data, Osage County had 16.9 percent of total
personal income from transfer payments, which is higher than both the state and the nation. Kay County had 19.9 percent of personal
income from transfer payments. Transfer payments represent that portion of total personal income whose source is state and federal
funds. These typically include social security, Medicare, and retirement / disability payments.
A growing concern across the country is the number of uninsured. Figure 2 displays the percentage of uninsured individuals
per county under the age of 65. This percentage includes both sexes and all income levels. Osage and Kay Counties are both in the
20-25 percent range of uninsured under the age of 65. This is comparable to the state percentage of 21.0 percent.
15
16
ADAIR
ALFALFA
ATOKA
BECKHAM
BLAINE
BRYAN
CANADIAN
CARTER
CHEROKEE
CHOCTAW
CLEVELAND
COMANCHE
COTTON
CRAIG
CUSTER
DELAWARE
DEWEY
ELLIS
GARFIELD
GRADY
GRANT
GREER
HARMON
HARPER
JACKSON
JEFFERSON
KAY
KIOWA LATIMER
LOVE
MAYES
MURRAY
MUSKOGEE
NOBLE
NOWATA
OKLAHOMA
OKMULGEE
OSAGE
OTTAWA
PAWNEE
PAYNE
PUSHMATAHA
ROGER MILLS
ROGERS
SEQUOYAH
STEPHENS
TILLMAN
TULSA
WAGONER
WASHITA
WOODS
WOODWARD
WASHINGTON
SHALL
MAR-MAJOR
KINGFISHER
TEXAS BEAVER
LOGAN
CREEK
LINCOLN
OKFUSKEE
McINTOSH
CADDO
MCCLAIN
GARVIN
SEMINOLE
POTTA-WATOMIE
HUGHES
PITTSBURG
HASKELL
LE FLORE
COAL
JOHNSTON
PONTOTOC
MCCURTAIN
CIMARRON
20-25%
Figure 2. Percentage Uninsured by County for All Income
Levels Under 65 Years of Age, 2006
17-20%
25-30%
30-35%
SOURCE: US Census Bureau, 2009
35% and over
State Percentage
Uninsured‐ 21.0%
20.8% 23.3%
17
Demographic Trends for the Fairfax, Hominy, and Newkirk Community Health Centers
Medical Service Area and Osage and Kay Counties
The Fairfax, Hominy, and Newkirk Community Health Centers medical service area is
delineated in Figure 3. The primary medical service area is the immediate area surrounding
these clinics which is most of Kay and Osage Counties. The population for Kay and Osage
counties is delineated in Table 4. Both Kay and Osage Counties experienced an increase in their
population from 1990 to 2000. Kay County only reported a 0.5 percent increase while Osage
County experienced an increase of 6.7 percent. From the years of 2000-2009, Osage County
reported an increase of 1.38 percent, and Kay County had a decrease of 4.1 percent. The state of
Oklahoma experienced an increase of 9.7 percent from 1990-2000 and 5.56 percent from 2000-
2009.
18
City County Hospital
No. of
Beds
Ponca City Kay Ponca City Medical Center 140
Perry Noble Perry Memorial Hospital 26
Fairfax Osage Fairfax Memorial Hospital 15
Pawhuska Osage Pawhuska Hospital, Inc 25
Cleveland Pawnee Cleveland Area Hospital 14
Figure 3
Fairfax, Hominy, and Newkirk Community Health Centers Medical
Service Area
Primary Medical Services Area
19
Table 4
Population for Kay County, Osage County, and Oklahoma
1990 2000 2009 % Change % Change
Population Population Population 1990-2000 2000-2009
State of Oklahoma 3,145,585 3,450,654 3,642,361 9.70% 5.56%
Kay County 48,056 48,080 46,110 0.05% -4.10%
Osage County 41,645 44,437 45,051 6.70% 1.38%
SOURCE: Population data from the U.S. Bureau of Census, 1990, 2000; U. S. Bureau of the
Census, Population Estimates Branch, 2009
Tables 5 (a and b) and 6 (a and b) provide further details about the demographic trends
of Osage and Kay Counties. Tables 5a and 5b presents the breakdown by age group for Osage
and Kay Counties and the State of Oklahoma from the census years 1990 and 2000 and the 2008
census estimates. The lowest age group, age 0-14, experienced a decrease from 1990-2000 and
2008 on both the state and county level for both counties. The age group of 45-64, however, has
seen a consistent increase over time. In Osage County, those age 45-64 made up 20.8 percent of
the total population in 1990, and this went up to 25.4 percent in 2008. Kay County also
experienced an increase from 19.5 percent in 1990 to 27.3 percent in 2008. This same trend
holds true for the state of Oklahoma as well.
Tables 6a and 6b shows the race and ethnic group percentages for Osage and Kay
County and the state of Oklahoma for the census years 1990 and 2000 and the 2008 census
estimates. The state has experienced a significant increase in people of Hispanic origin,
increasing from 2.7 percent in 1990 to 7.6 percent in 2008. Osage and Kay Counties have
experienced a similar trend. In 1990, those of Hispanic origin made up 1.6 percent of the Osage
County population and 1.8 percent of the Kay County Population. In 2000, this number
20
increased to 2.1 percent for Osage County and 4.3 percent for Kay. This number again increased
in the 2008 estimates to 2.7 percent for Osage County and 5.9 percent for Kay County.
21
Table 5a
Age Groups -
for Population Numbers and Percent of Total Population
Osage County and the State of Oklahoma
Osage County State of Oklahoma
Age Groups Number Percent Number Percent
1990 Census
0-14 9,609 23.1% 702,537 22.3%
15-19 2,974 7.1% 233,093 7.4%
20-24 2,107 5.1% 222,766 7.1%
25-44 12,585 30.2% 961,560 30.6%
45-64 8,674 20.8% 601,416 19.1%
65+ 5,696 13.7% 424,213 13.5%
Totals 41,645 100.0% 3,145,585 100.0%
2000 Census
0-14 9,523 21.4% 732,907 21.2%
15-19 3,376 7.6% 269,373 7.8%
20-24 2,229 5.0% 247,165 7.2%
25-44 12,205 27.5% 975,169 28.3%
45-64 11,297 25.4% 770,090 22.3%
65+ 5,807 13.1% 455,950 13.2%
Totals 44,437 100.0% 3,450,654 100.0%
2008 Estimates
0-14 8,011 17.6% 753,870 20.7%
15-19 3,135 6.9% 251,880 6.9%
20-24 3,045 6.7% 270,201 7.4%
25-44 11,748 25.8% 957,085 26.3%
45-64 13,417 29.5% 918,688 25.2%
65+ 6,133 13.5% 490,637 13.5%
Totals 45,489 100.0% 3,642,361 100.0%
SOURCE: U.S. Census Bureau, Census data for 1990 and 2000, estimated population for 2008
(www.census.gov [April 2010]).
22
Table 5b
Age Groups -
for Population Numbers and Percent of Total Population
Kay County and the State of Oklahoma
Kay County State of Oklahoma
Age Groups Number Percent Number Percent
1990 Census
0-14 10,780 22.4% 702,537 22.3%
15-19 3,233 6.7% 233,093 7.4%
20-24 2,597 5.4% 222,766 7.1%
25-44 13,700 28.5% 961,560 30.6%
45-64 9,354 19.5% 601,416 19.1%
65+ 8,392 17.5% 424,213 13.5%
Totals 48,056 100.0% 3,145,585 100.0%
2000 Census
0-14 10,360 21.5% 732,907 21.2%
15-19 3,872 8.1% 269,373 7.8%
20-24 2,702 5.6% 247,165 7.2%
25-44 12,034 25.0% 975,169 28.3%
45-64 10,958 22.8% 770,090 22.3%
65+ 8,154 17.0% 455,950 13.2%
Totals 48,080 100.0% 3,450,654 100.0%
2008 Estimates
0-14 9,598 21.0% 753,870 20.7%
15-19 3,285 7.2% 251,880 6.9%
20-24 2,782 6.1% 270,201 7.4%
25-44 10,020 22.0% 957,085 26.3%
45-64 12,464 27.3% 918,688 25.2%
65+ 7,483 16.4% 490,637 13.5%
Totals 45,632 100.0% 3,642,361 100.0%
SOURCE: U.S. Census Bureau, Census data for 1990 and 2000, estimated population for 2008
(www.census.gov [April 2010]).
23
Table 6a
Race and Ethnic Groups -
for Population Numbers and Percent of Total Population
Osage County and the State of Oklahoma
Osage County State of Oklahoma
Race/Ethnic Groups Number Percent Number Percent
1990 Census
White 30,703 73.7% 2,583,512 82.1%
Black 4,148 10.0% 233,801 7.4%
Native American 1 6,054 14.5% 252,420 8.0%
Other 2 80 0.2% 75,852 2.4%
Two or more Races 3 n/a n/a n/a n/a
Hispanic Origin 4 660 1.6% 86,160 2.7%
2000 Census
White 29,380 66.1% 2,721,554 78.9%
Black 4,773 10.7% 264,235 7.7%
Native American 1 6,299 14.2% 275,558 8.0%
Other 2 129 0.3% 50,686 1.5%
Two or more Races 3 2,916 6.6% 138,621 4.0%
Hispanic Origin 4 940 2.1% 179,304 5.2%
2008 Estimates
White 29,899 65.7% 2,600,115 71.4%
Black 4,827 10.6% 280,290 7.7%
Native American 1 6,318 13.9% 278,659 7.7%
Other 2 212 0.5% 63,856 1.8%
Two or more Races 3 3,021 6.6% 140,821 3.9%
Hispanic Origin 4 1,212 2.7% 278,620 7.6%
SOURCE: U.S. Census Bureau, Census data for 1990 and 2000, estimated population for 2008 (www.census.gov [April
2010]).
1 Native American includes American Indians and Alaska Natives.
2 Other is defined as Asian Americans, Native Hawaiians, Pacific Islanders and all others.
3 Two or more races indicate a person is included in more than one race group.
4 Hispanic population is not a race group but rather a description of ethnic origin; Hispanics are included in the five race
groups.
n/a - Not available; 1990 census did not report this category
24
Table 6b
Race and Ethnic Groups -
for Population Numbers and Percent of Total Population
Kay County and the State of Oklahoma
Kay County State of Oklahoma
Race/Ethnic Groups Number Percent Number Percent
1990 Census
White 42,552 88.5% 2,583,512 82.1%
Black 854 1.8% 233,801 7.4%
Native American 1 3,555 7.4% 252,420 8.0%
Other 2 244 0.5% 75,852 2.4%
Two or more Races 3 n/a n/a n/a n/a
Hispanic Origin 4 851 1.8% 86,160 2.7%
2000 Census
White 39,687 82.5% 2,721,554 78.9%
Black 850 1.8% 264,235 7.7%
Native American 1 3,504 7.3% 275,558 8.0%
Other 2 273 0.6% 50,686 1.5%
Two or more Races 3 1,721 3.6% 138,621 4.0%
Hispanic Origin 4 2,045 4.3% 179,304 5.2%
2008 Estimates
White 36,247 79.4% 2,600,115 71.4%
Black 892 2.0% 280,290 7.7%
Native American 1 3,695 8.1% 278,659 7.7%
Other 2 333 0.7% 63,856 1.8%
Two or more Races 3 1,784 3.9% 140,821 3.9%
Hispanic Origin 4 2,681 5.9% 278,620 7.6%
SOURCE: U.S. Census Bureau, Census data for 1990 and 2000, estimated population for 2008 (www.census.gov [April
2010]).
1 Native American includes American Indians and Alaska Natives.
2 Other is defined as Asian Americans, Native Hawaiians, Pacific Islanders and all others.
3 Two or more races indicate a person is included in more than one race group.
4 Hispanic population is not a race group but rather a description of ethnic origin; Hispanics are included in the five race
groups.
n/a - Not available; 1990 census did not report this category
25
The Direct Economic Activities
The health sector creates employment and payroll impacts, which are important direct
economic activities for the Fairfax, Hominy, and Newkirk Community Health Centers service
area. The health sector is typically divided into the following six components:
• Hospital
• Physicians, Dentists, and Other Medical Professionals
• Nursing and Protective Care
• Home Health
• Pharmacies
• Other Medical and Health Services
For the purpose of this report, only the community health centers will be examined.
Therefore, all three will be represented in the Physicians, Dentists, and Other Medical
Professionals sector. The total of the three clinics employs 47 FTEs with a total direct payroll of
$1,714,075.
The Fairfax Clinic that opened January 1, 2006, employs 28 FTEs with an annual payroll
of $1,191,005. Hominy’s Clinic that opened in May of 2007 employs 11 FTEs with an annual
payroll of $345,410. The Newkirk Clinic is the newest clinic, opening in July 2009. This clinic
employs 8 FTEs with an annual payroll of $177,660.
The health sector is vitally important as both a community employer and a source of
income to the community's economy. As demonstrated in Table 7, the health sector employs a
large number of residents. These residents, along with businesses in the health sector, purchase a
large amount of goods and services from businesses in the Fairfax, Hominy, and Newkirk
Community Health Centers medical service area. These impacts are referred to as secondary
impacts or benefits to the economy. Before the secondary impacts of the health sector are
discussed, the basic concepts of community economics will be reviewed.
26
Table 7
Direct Economic Activities of the Health Sector
in the Fairfax, Hominy, and Newkirk Community Health Centers Medical Service Area
Component Full-Time & Part-
Time Employment
Total Payroll with
Benefits
Fairfax Clinic 28 $1,191,005
Includes one DO, one PA, one Dentist one
Psychiatrist, and one Psychologist
Hominy Clinic
Includes one DO, one PA, and one CMW/ARNP 11 $345,410
Newkirk Clinic 8 $177,660
Includes one DO and one ARNP
Totals 47 $1,714,075
SOURCE: Local survey and estimates from research.
27
Basic Concepts of Community Economics and
Income and Employment Multipliers
Figure 3 illustrates the major flows of goods, services, and dollars of any economy. The
foundations of a community's economy are those businesses that sell some or all of their goods
and services to buyers outside of the community. Such a business is a basic industry. The two
arrows in the upper right portion of
Figure 3 represent the flow of products
out of, and dollars into, a community. To
produce these goods and services for
"export" outside the community, the
basic industry purchases inputs from
outside of the community (upper left
portion of Figure 3), labor from the
residents or "households" of the
community (left side of Figure 3), and
inputs from service industries located
within the community (right side of
Figure 3). Households using their
earnings to purchase goods and services from the community’s service industries complete the
flow of labor, goods, and services in the community (bottom of Figure 3). It is evident from the
relationships illustrated in Figure 3 that a change in any one segment of a community's economy
will cause reverberations throughout the entire economic system of the community.
Households
Industry
Basic
Services
Goods &
$
Labor Inputs
Products
Inputs
$ $
$
$
Services
$ Figure 3 $
Community Economic System
28
Consider, for instance, the closing of a hospital. The services section will no longer pay
employees and the dollars flowing into households from these jobs will stop. Likewise, the
hospital will not purchase goods from other businesses, and the dollar flow to other businesses
will stop. This decreases income in the "households" segment of the economy. Since earnings
would decrease, households decrease their purchases of goods and services from businesses
within the "services" segment of the economy. This, in turn, decreases the amount of labor and
input that these businesses' purchase. Thus, the change in the economic base works its way
throughout the entire local economy. The total impact of a change in the economy consists of
direct, indirect, and induced impacts. Direct impacts are the changes in the activities of the
impacting industry, such as the closing of a hospital. The impacting business, such as the
hospital, changes its purchase of inputs as a result of the direct impact. This produces an indirect
impact in the business sectors.
Both the direct and indirect impacts change the flow of dollars to the community's
households. The households alter their consumption accordingly. The effect of this change in
household consumption upon businesses in a community is referred to as an induced impact. A
measure is needed that yields the effects created by an increase or decrease in economic activity.
In economics, this measure is called the multiplier effect. The multipliers used in this report are
defined as:
“…the ratio between direct employment (or income), or that employment (or income)
used by the industry initially experiencing a change in final demand and the direct,
indirect, and induced employment (or income).”
An employment multiplier of 3.0 indicates that if one job is created by a new industry,
2.0 jobs are created in other sectors due to business (indirect) and household (induced) spending.
29
Secondary Impacts of the Health Sector
on the Economy of Fairfax, Hominy, and Newkirk Community Health Centers
Employment and income multipliers for the area have been calculated by use of the
IMPLAN model. This model was developed by the U.S. Forest Service1 and allows for the
development of multipliers for various sectors of an economy. The employment multipliers for
the components of the health sector are shown in Table 8, column 3. The employment multiplier
for the Physicians, Dentists, and Other Medical Professionals component is 1.33 for Osage
County and 1.45 for Kay County. This indicates that for each job in that component, an
additional 0.33 jobs are created throughout the area due to business (indirect) and household
(induced) spending in Osage County. Similarly, each job associated with the CHC creates and
additional 0.45 jobs in Kay County. The employment multipliers for the other health sector
components are also shown in Table 8, column 3.
Applying the employment multipliers to the employment for each component yields an
estimate of the impact on the economy (Table 8, columns 2, 3, and 4). For example, the
component of Physicians, Dentists, and Other Medical Professionals for the Fairfax Clinic has a
direct employment of 28 full-time and part-time employees; applying the employment multiplier
of 1.33 to the employment number of 28 brings the total employment impact of the hospital to 37
employees. The same method is used for the Hominy clinic where a total impact of 15
employees is observed after applying the multiplier of 1.33 to the direct number of 11
employees. The Newkirk Clinic follows the same method; however, the multiplier of 1.45 is
used for Kay County. Therefore, the total employment impact for the Newkirk Clinic is 12
employees. The total employment impact of the health sector in Fairfax, Hominy, and Newkirk
1 For complete details of model, see [1], [2], and [3].
30
Community Health Centers medical service area is estimated to be 63 employees (Table 8, total
of column 4).
31
Table 8
Fairfax, Hominy, and Newkirk Community Health Centers Medical Service Area Health Sector Impact
on Employment and Income, and Retail Sales and Sales Tax
(1) (2) (3) (4) (5) (6) (7) (8) (9)
Employment Income Retail 1 Cent
Health Sectors Employed Multiplier Impact Income Multiplier Impact Sales
Sales
Tax
Fairfax Clinic1 28 1.33 37 $1,191,005 1.13 $1,342,263 $154,629* $1,546*
Hominy Clinic1 11 1.33 15 $345,410 1.13 $389,277 $44,845* $448*
Newkirk Clinic1 8 1.45 12 $177,660 1.27 $225,095 $66,426* $664*
Total 47 63 $1,714,075 $1,956,635 $265,899* $2,659*
SOURCE: 2008 IMPLAN database, Minnesota IMPLAN Group, Inc.; Local data for employment, employee compensation and proprietor's income; income estimated
based on state average incomes if local data not available
1 Multipliers for the Physicians, Dentists, and Other Medical Professionals Component were used.
* Based on the ratio between Osage County retail sales and income (11.52%) and Kay County retail sales and income (29.51%) – from 2009 County Sales Tax Data and
2007 Personal Income Estimates from the Bureau of Economic Analysis.
32
Applying the income multipliers to the income (payroll including benefits) for each of the
health sector components yields an estimate of each component’s income impact on the Fairfax,
Hominy and Newkirk Community Health Centers medical service area (Table 8, columns 5, 6,
and 7). The income multiplier for the Physicians, Dentists, and Other Medical Professionals
component is 1.13 for Osage County and 1.27 for Kay County (Table 8, column 6). This
indicates that for each dollar in that component, an additional 0.13 dollars are created throughout
the area due to business (indirect) and household (induced) spending in Osage County. Also,
each dollar spent for salary payments to CHC employees in Kay County generates another 27
cents throughout the economy. The Fairfax Clinic has a total income impact of $1,342,263 after
applying the multiplier of 1.13 to the direct payroll of $1,191,005. The Hominy Clinic has a
total income impact of $389,277 after the proper multiplier is applied. The Newkirk Clinic has a
total income impact of $225,095 after the Kay County Physicians, Dentists, and Other Medical
Professionals multiplier of 1.27 is applied to the direct payroll of $177,660. The total income
impact of the health sector on the economy of Fairfax, Hominy, and Newkirk Community Health
Centers medical service area is projected to be $1,956,635 (Table 8, total of column 7).
Income also has an impact on retail sales, and CHCs in this report have their own distinct
effect on these retail sales. The local retail sales capture ratio is used to estimate the effect of the
health sector on retail sales. This ratio indicates the percentage of personal income spent locally
on items that generate local sales tax. If the county ratio between retail sales and income
continues as it has in the past several years (around 11.52 percent for Osage County and 29.51
percent for Kay County), then direct and secondary retail sales generated by the CHCs equals
$265,899 (Table 8, total of column 8). Each of the components’ income impacts is utilized to
determine the retail sales and a one-cent sales tax collection for each component. A one-cent
sales tax collection is estimated to generate $2,659 in the Fairfax, Hominy, and Newkirk
Community Health Centers medical service area economy as a result of the health sector income
33
impact (Table 8, total of column 9). This estimate is probably low, as many health care
employees tend to spend a larger portion of their income in local establishments that collect sales
tax. The bottom line is that the Fairfax, Hominy, and Newkirk Community Health Centers not
only contributes greatly to the medical health of the community, but also to the economic health
of the community.
Summary
The economic impact on the economy of Fairfax, Hominy, and Newkirk Community
Health Centers is tremendous. The health sector employs a large number of residents, similar to
a large industrial firm. The secondary impact occurring in the community is extremely large and
is a testament to the importance of the health sector. If the health sector increases or decreases in
size, the medical health of the community, as well as the economic health of the community, is
greatly affected. For the attraction of industrial firms, businesses, and retirees, it is crucial that
the area have a quality health sector. The fact that a prosperous health sector also contributes to
the economic health of the community is often overlooked.
References
[1] IMPLAN Professional Version 2.0 Social Accounting & Impact Analysis Software –
USER’S GUIDE, ANALYSIS GUIDE, DATA GUIDE, MIG, Minnesota IMPLAN
Group, 2nd Edition, June 2000.
[2] Palmer, Charles and Eric Siverts, IMPLAN ANALYSIS GUIDE. U.S. Department of
Agriculture, Forest Service Land Management Planning Systems Section, Rocky
Mountain Forest and Range Experiment Station, Fort Collins, Colorado, 1985.
34
[3] Siverts, Eric, Charles Palmer, Ken Walters, and Greg Alward, IMPLAN USER'S
GUIDE, U.S. Department of Agriculture, Forest Service, Systems Application Unit, Land
Management Planning, Fort Collins, Colorado, 1983.

Click tabs to swap between content that is broken into logical sections.

The Economic Impact of the
Fairfax, Hominy, and Newkirk Community Health Centers
Hospitals Nursing Homes
Physicians, etc. Other Services Pharmacies
Oklahoma State Department of Health
Office of Rural Health
Oklahoma Cooperative Extension Service
Oklahoma State University
April 2010
AE-10006
The Economic Impact of the
Fairfax, Hominy, and Newkirk Community Health Centers
Community Health Engagement Process documents available online at:
www.okruralhealthworks.org
Lara Brooks, Assistant Extension Specialist, OSU, Stillwater
Phone: 405-744-6083, Fax: 405-744-9835, Email: lara.brooks@okstate.edu
Brian Whitacre, Assistant Professor and Extension Economist, OSU, Stillwater
405-744-6083
Jack Frye, Area Extension Rural Development Specialist, OSU, Ada
580-332-4100
Stan Ralstin, Area Extension Rural Development Specialist, OSU, Enid
580-237-7677
Richard Rexwinkle, Osage County Extension Director, Pawhuska
918-287-4170
Larry Klump, Kay County Extension Directory, Newkirk
580-362-3194
Corie Kaiser, Health Consultant, Oklahoma Center for Rural Health, Oklahoma City
405-945-9197
Val Schott, Director, Oklahoma Center for Rural Health, Oklahoma City & Tulsa
405-945-9197
Oklahoma State Department of Health
Office of Rural Health
Oklahoma Cooperative Extension Service
Oklahoma State University
April 2010
1
The Economic Impact of the
Fairfax, Hominy, and Newkirk Community Health Centers
Medical facilities have a tremendous medical and economic impact on the community in
which they are located. This is especially true with health care facilities, such as community
health centers. These facilities not only employ a large number of people and have a significant
payroll, but they also draw a large number of people from rural areas that need medical services
into the community. The overall objective of this study is to measure the economic impact of the
health sector on the Fairfax, Hominy, and Newkirk Community Health Centers on the areas that
they serve. The specific objectives of this report are to:
1. Review economic trends of the health sector for the U.S. and Osage and Kay
Counties;
2. Identify population for the medical service area of Fairfax, Hominy, and Newkirk
Community Health Centers;
3. Summarize the direct economic activities of the community health centers;
4. Review concepts of community economics and multipliers; and
5. Estimate the secondary and total impacts of the Fairfax, Hominy, and Newkirk
Community Health Centers.
No recommendations will be made in this report.
Health Services and Rural Development
The nexus between health care services and rural development is often overlooked. At
least three primary areas of commonality exist. A strong health care system can help attract and
maintain business and industry growth, and attract and retain retirees. A strong health care
system can also create jobs in the local area. The following section looks at how the health care
sector impacts these areas.
2
Services that Impact Rural Development
Type of Growth Services Important to Attract Growth
Industrial and Business Health and Education
Retirees Health and Safety
Business and Industry Growth
Studies have found that quality-of-life (QOL) factors are playing a dramatic role in
business and industry location decisions. Among the most significant of the QOL variables are
health care services, which are important for at least three reasons.
First, as noted by a member of the Board of Directors of a community economic
development corporation, the presence of good health and education services is imperative to
industrial and business leaders as they select a community for location. Employees and
participating management may offer strong resistance if they are asked to move into a
community with substandard or inconveniently located health services.
Secondly, when a business or industry makes a location decision, it wants to ensure that
the local labor force will be productive, and a key factor in productivity is good health. Thus,
investments in health care services can be expected to yield dividends in the form of increased
labor productivity.
The cost of health care services is the third factor that is considered by business and
industry in development decisions. Research shows that corporations take a serious look at
health care costs in determining site locations. Sites that provide health care services at a lower
cost are given higher consideration for new industry than sites with much higher health care
costs.
3
Health Services and Attracting Retirees
A strong and convenient health care system is important to retirees, a special group of
residents whose spending and purchasing can be a significant source of income for the local
economy. Many rural areas have environments (e.g., moderate climate and outdoor activities)
that enable them to be in a good position to attract and retain retirees. The amount of spending
embodied in this population, including the purchasing power associated with Social Security,
Medicare, and other transfer payments, is substantial. Additionally, middle and upper income
retirees often have substantial net worth. Although the data are limited, several studies suggest
health services may be a critical variable that influences the location decision of retirees. For
example, one study found that four items were the best predictors of retirement locations: safety,
recreational facilities, dwelling units, and health care. Another study found that nearly 60
percent of potential retirees said health services were in the “must have” category when
considering a retirement community. Only protective services were mentioned more often than
health services as a “must have” service.
Health Services and Job Growth
A factor important to the success of rural economic development is job creation. The
health care sector is an extremely fast growing sector, and based on the current demographics,
there is every reason to expect this trend to continue. Data in Table 1 provide selected health
expenditures and employment data for the United States. Several highlights from the national
data are:
􀂃 In 1970, health care services as a share of the national gross domestic product (GDP)
were 7.2 percent. This increased to 16.2 percent in 2007;
􀂃 Per capita health expenditures increased from $356 in 1970 to $7,421 in 2007;
4
􀂃 Employment in the health sector increased almost 324.0 percent from 1970 to 2007;
and
􀂃 Annual increases in employment from 2003 to 2007 ranged from 2.0 percent to 2.7
percent.
In addition, the Bureau of Labor Statistics projects substantial increases in health care
expenditures from 2009 through 2018. In fact, the U. S. Department of Health and Human
Services, Centers for Medicare and Medicaid Services predict that health care expenditures will
account for 18.9 percent of GDP by 2015 and increase to 20.3 percent of GDP in 2018. Per
capita health care expenditures are projected to increase to $10,929 in 2015 and to $13,100 in
2018. Total health expenditures are projected to increase to almost $4.4 trillion in 2018.
5
Table 1
United States Health Expenditures and Employment Data
1970-2008; Projected for 2009, 2012, 2015 & 2018
Total Per Capita Health Health Ave. Annual
Year Health Health as % Sector Increase in
Expenditures Expenditures of
GDP
Employment Employment
($Billions) ($) (%) (000) (%)
1970 $74.9 $356 7.2% 3,052 a
1980 253.4 1,100 9.1% 5,278 a 7.3%
1990 714.1 2,814 12.3% 7,814 a 4.8%
2000 1,352.9 4,789 13.6% 10,858 a 3.9%
2001 1,469.2 5,150 14.3% 11,188 a 3.0%
2002 1,602.4 5,564 15.1% 11,536 a 3.1%
2003 1,735.2 5,973 15.6% 11,817 b N/A
2004 1,855.4 6,328 15.6% 12,055 b 2.0%
2005 1,982.5 6,701 15.7% 12,314 b 2.1%
2006 2,112.5 7,071 15.8% 12,602 b 2.3%
2007 2,239.7 7,423 15.9% 12,946 b 2.7%
2008 2,338.7 7,681 16.2% 13,469 b 4.0%
Projections
2009 2,509.5 8,160 17.6%
2012 2,930.7 9,282 18.0%
2015 3,541.3 10,929 18.9%
2018 4,353.2 13,100 20.3%
SOURCES: Bureau of Labor Statistics (www.bls.gov [January 2010]); 2010 Centers for Medicare &
Medicaid Services, National Health Expenditures 1970-2008 and National Health Expenditure Projections
2008-2018 (http://www.cms.hhs.gov/nationalhealthexpenddata [January 2010]).
N/A - Not Available.
a Based on Standard Industrial Classification (SIC) codes for health sector employment.
b Based on North American Industrial Classification System (NAICS) for health sector employment.
F
by type o
percent o
percent o
for 32.0 p
Figure 1 illus
of health serv
of the total.
of the total.
percent.
strates 2008
vice. The la
The next lar
Community
health expen
argest health
rgest type of
health cente
6
nditures by p
service type
f health serv
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percent of gr
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7
Osage and Kay Counties Economic Trends
Data relative to the health sector for Osage and Kay Counties are provided in Tables 2a
and 2b. Data in Tables 2a and 2b are from the U. S. Census Bureau County Business Patterns,
based on the North American Industry Classification System (NAICS). The table is based on
employment and payroll for both health services and total county services and health services as
a percent of total county services for Osage and Kay Counties. Also, health services for the state
of Oklahoma are illustrated as a percent of total state employment and payroll for comparison to
the county data. This table states how health services have changed over time. Health services
employment in Osage County increased 9.8 percent from 614 employees in 2000 to 674
employees in 2007 (Table 2). During the same time period, the total county employment also
increased 23.9 percent. County health services employment as a percent of total county
employment decreased from 14.5 percent in 2000 to 12.9 percent in 2007, while the state health
services employment as a percent of total state employment increased from 14.1 percent in 2000
to 15.3 percent in 2007. The county saw a decrease of 1.6 percent over this seven year period,
while the state grew by1.2 percent.
The county health services payroll experienced significant increases over time. Osage
County’s health services payroll increased 24.8 percent from about $9.2 million in 2000 to about
$11.4 million in 2007; this compares to an increase of 56.8 percent for the total county payroll
(Table 2a). During this same time period, the state health services payroll increased from 14.0
percent to 15.3 percent. County health services payroll as a percent of total county payroll
decreased from 10.9 percent in 2000 to 8.7 percent in 2007.
Kay County experienced a 13.6 percent increase in healthcare employment from 2000 to
2007. However, total county employment experienced a decrease of 10.1 percent during the
8
same time period. Health services employment as a percent of total county employment
increased 2.7 percent from 2000 to 2007 (Table 2b). Kay County healthcare payroll also
experienced an increase of 30.3 percent from nearly $44.7 million in 2000 to $58.2 million in
2007. Kay County total county payroll increased 12.4 percent during the same time period.
Health services payroll as a percent of total county payroll increased 1.5 percent which is greater
than the state (1.3 percent) (Table 2b). These numbers all suggest that in total, the health sector
is very important to the economies of Osage and Kay Counties. Later in this report, we will
quantify the role that the community health centers have played in benefitting the economy.
9
Table 2a
Fairfax and Hominy Community Health Centers
Employment and Payroll for County Business Patterns*
Osage County and the State of Oklahoma
Employment
Based Health Total Hlth Svcs as a Hlth Svcs as a
on Services County % of Total % of Total
NAICS1 Employment Employment
County
Employment
State
Employment
2000 614 4,233 14.5% 14.1%
2001 647 4,117 15.7% 14.3%
2002 679 3,413 19.9% 15.1%
2003 626 3,420 18.3% 15.2%
2004 622 3,318 18.7% 15.4%
2005 528 3,521 15.0% 15.4%
2006 571 4,256 13.4% 15.1%
2007 674 5,243 12.9% 15.3%
% Change '00 - '07 9.8% 23.9%
Payroll
Based Health Total Hlth Svcs as a Hlth Svcs as as
on Services County % of Total % of Total
NAICS1
Payroll
($1000s)
Payroll
($1000s) County Payroll State Payroll
2000 $9,153.00 $84,005.00 10.9% 14.0%
2001 $10,304.00 $84,224.00 12.2% 14.5%
2002 $10,047.00 $61,635.00 16.3% 15.2%
2003 $9,816.00 $64,841.00 15.1% 15.2%
2004 $10,327.00 $66,194.00 15.6% 15.7%
2005 $9,845.00 $79,664.00 12.4% 15.5%
2006 $11,328.00 $97,710.00 11.6% 15.1%
2007 $11,423.00 $131,729.00 8.7% 15.3%
% Change '00 - '07 24.8% 56.8%
Source: U.S. Census Bureau, County Business Patterns; 2000-2007 data (www.census.gov [April 2010]).
1 The Health Care and Social Assistance NAICS sector comprises establishments providing health care and social assistance for individuals.
The sector includes both health care and social assistance because it is sometimes difficult to distinguish between the boundaries of these two
activities. Industries in this sector are arranged on a continuum starting with those establishments providing medical care exclusively,
continuing with those providing health care and social assistance, and finally finishing with those providing only social assistance. The
services provided by establishments in this sector are delivered by trained professionals. All industries in the sector shared this commonality
of process, namely, labor inputs of health practitioners or social workers with the requisite expertise. Many of the industries in the sector are
defined based on the educational degree held by the practitioners included in the industry.
* Data from County Business Patterns exclude self-employed persons, employees of private households, railroad employees, agricultural
production workers, and for most government employees (except for those working in wholesale liquor establishments, retail liquor stores,
Federally-chartered savings institutions, Federally-charted credit unions, and hospitals).
10
Table 2b
Newkirk Community Health Center
Employment and Payroll for County Business Patterns*
Kay County and the State of Oklahoma
Employment
Based Health Total Hlth Svcs as a Hlth Svcs as a
on Services County % of Total % of Total
NAICS1 Employment Employment County Employment
State
Employment
2000 1,914 18,433 10.4% 14.1%
2001 1,847 18,268 10.1% 14.3%
2002 2,325 18,922 12.3% 15.1%
2003 2,232 16,172 13.8% 15.2%
2004 1,960 16,140 12.1% 15.4%
2005 2,190 17,238 12.7% 15.4%
2006 2,183 17,265 12.6% 15.1%
2007 2,175 16,576 13.1% 15.3%
% Change '00 - '07 13.6% -10.1%
Payroll
Based Health Total Hlth Svcs as a Hlth Svcs as as
on Services County % of Total % of Total
NAICS1
Payroll
($1000s)
Payroll
($1000s) County Payroll State Payroll
2000 $44,692.00 $481,024.00 9.3% 14.0%
2001 $45,527.00 $529,319.00 8.6% 14.5%
2002 $50,895.00 $544,562.00 9.3% 15.2%
2003 $50,821.00 $432,722.00 11.7% 15.2%
2004 $50,443.00 $479,879.00 10.5% 15.7%
2005 $55,404.00 $552,196.00 10.0% 15.5%
11
2006 $58,503.00 $581,781.00 10.1% 15.1%
2007 $58,230.00 $540,621.00 10.8% 15.3%
% Change '00 - '07 30.3% 12.4%
Source: U.S. Census Bureau, County Business Patterns; 2000-2007 data (www.census.gov [April 2010]).
1 The Health Care and Social Assistance NAICS sector comprises establishments providing health care and social assistance for individuals. The
sector includes both health care and social assistance because it is sometimes difficult to distinguish between the boundaries of these two activities.
Industries in this sector are arranged on a continuum starting with those establishments providing medical care exclusively, continuing with those
providing health care and social assistance, and finally finishing with those providing only social assistance. The services provided by establishments
in this sector are delivered by trained professionals. All industries in the sector shared this commonality of process, namely, labor inputs of health
practitioners or social workers with the requisite expertise. Many of the industries in the sector are defined based on the educational degree held by
the practitioners included in the industry.
* Data from County Business Patterns exclude self-employed persons, employees of private households, railroad employees, agricultural production
workers, and for most government employees (except for those working in wholesale liquor establishments, retail liquor stores, Federally-chartered
savings institutions, Federally-charted credit unions, and hospitals).
Basic economic indicators of the Osage County and Kay County economy are illustrated in Tables 3a and 3b. Based on
Bureau of Economic Analysis data, the 2007 per capita income for Osage County of $30,350 is lower than the per capita income for
the state of Oklahoma and the United States. The per capita income for Kay County was $33,621 which was also lower than
Oklahoma and the United States (Table 3b).
Table 3a
Economic Indicators for Osage County,
the State of Oklahoma and the Nation
Indicator County State U.S.
Total Personal Income (2007) $1,378,877,000 $126,272,950,000 $11,634,322,000,000
Per Capita Income (2007) $30,350 $34,997 $38,615
Employment (2008) 19,291 1,681,854 145,362,000
Unemployment (2008) 854 66,562 8,924,000
12
Unemployment Rate (2008) 4.2% 3.8% 5.8%
Employment (February 2010) 18,530* 1,638,235 137,203,000
Unemployment (February 2010) 1,737* 128,660 15,991,000
Unemployment Rate (February 2010) 8.6%* 7.3% 10.4%
Percentage of People in Poverty (2008) 13.1% 15.7% 13.2%
Percentage of Under 18 in Poverty (2008) 19.8% 22.0% 18.2%
Transfer Dollars (2007) $233,524,000 $21,218,050,000 $1,712,794,000,000
Transfer Dollars as Percentage of 16.9% 16.8% 14.7%
Total Personal Income (2007)
*Employment data for Osage County for February 2010 should be considered preliminary
SOURCES: 2010 Bureau of Labor Statistics; 2010 Bureau of Economic Analysis; 2010 U.S. Census Bureau.
Table 3b
Economic Indicators for Kay County,
the State of Oklahoma and the Nation
Indicator County State U.S.
Total Personal Income (2007) $1,536,853,000 $126,272,950,000 $11,634,322,000,000
Per Capita Income (2007) $33,621 $34,997 $38,615
13
According to the Bureau of Labor Statistics, the unemployment rate for Osage County was 4.2 percent for 2008, which was the
higher than the state (3.8 percent) but lower than the national (5.8 percent) rates. Kay County experienced a similar trend of a 3.6
percent unemployment rate which was lower than both the state and the nation. Moreover, in February 2010, the preliminary
unemployment rate estimate for Osage County had increased to 8.6 percent, which was higher than the state (7.3 percent) but lower
than the nation (10.4 percent). Preliminary estimates for Kay County indicate that the unemployment rate has increased to 9.2 percent
in February. This places Kay County above the state rate and below the national unemployment rate. However, the number of people
employed in Osage County decreased 4 percent from 2008 to February 2010, while the number of people unemployed increased 103
Employment (2008) 23,816 1,681,854 145,362,000
Unemployment (2008) 857 66,562 8,924,000
Unemployment Rate (2008) 3.6% 3.8% 5.8%
Employment (February 2010) 21,288* 1,638,235 137,203,000
Unemployment (February 2010) 2,146* 128,660 15,991,000
Unemployment Rate (February 2010) 9.2%* 7.3% 10.4%
Percentage of People in Poverty (2008) 17.2% 15.7% 13.2%
Percentage of Under 18 in Poverty (2008) 26.0% 22.0% 18.2%
Transfer Dollars (2007) $305,450,000 $21,218,050,000 $1,712,794,000,000
Transfer Dollars as Percentage of 19.9% 16.8% 14.7%
Total Personal Income (2007)
*Employment data for Kay County for February 2010 should be considered preliminary
SOURCES: 2010 Bureau of Labor Statistics; 2010 Bureau of Economic Analysis; 2010 U.S. Census Bureau.
14
percent during that same time period. The number of people employed in Kay County decreased 11 percent during the same time
period, and the number of unemployed increased 150 percent. The unemployment and employment estimates from February 2010 are
considered preliminary.
From the U. S. Census Bureau, the percent of people in poverty in Osage County was 13.1 percent in 2008, as compared to
15.7 percent for the state and 13.2 percent nationally. The percentage of people under age 18 in poverty in 2008 followed similar
trends, with Osage County being lower than both the state but higher than the nation. The percentage of people in poverty in Kay
County was 17.2 percent which is higher than both the state and the nation, and the percentage of people under the age of 18 in
poverty was 26.0 percent which is also higher than both the state and the nation as well. Another economic indicator is the percent of
personal income that is from transfer payments. Based on Bureau of Economic Analysis data, Osage County had 16.9 percent of total
personal income from transfer payments, which is higher than both the state and the nation. Kay County had 19.9 percent of personal
income from transfer payments. Transfer payments represent that portion of total personal income whose source is state and federal
funds. These typically include social security, Medicare, and retirement / disability payments.
A growing concern across the country is the number of uninsured. Figure 2 displays the percentage of uninsured individuals
per county under the age of 65. This percentage includes both sexes and all income levels. Osage and Kay Counties are both in the
20-25 percent range of uninsured under the age of 65. This is comparable to the state percentage of 21.0 percent.
15
16
ADAIR
ALFALFA
ATOKA
BECKHAM
BLAINE
BRYAN
CANADIAN
CARTER
CHEROKEE
CHOCTAW
CLEVELAND
COMANCHE
COTTON
CRAIG
CUSTER
DELAWARE
DEWEY
ELLIS
GARFIELD
GRADY
GRANT
GREER
HARMON
HARPER
JACKSON
JEFFERSON
KAY
KIOWA LATIMER
LOVE
MAYES
MURRAY
MUSKOGEE
NOBLE
NOWATA
OKLAHOMA
OKMULGEE
OSAGE
OTTAWA
PAWNEE
PAYNE
PUSHMATAHA
ROGER MILLS
ROGERS
SEQUOYAH
STEPHENS
TILLMAN
TULSA
WAGONER
WASHITA
WOODS
WOODWARD
WASHINGTON
SHALL
MAR-MAJOR
KINGFISHER
TEXAS BEAVER
LOGAN
CREEK
LINCOLN
OKFUSKEE
McINTOSH
CADDO
MCCLAIN
GARVIN
SEMINOLE
POTTA-WATOMIE
HUGHES
PITTSBURG
HASKELL
LE FLORE
COAL
JOHNSTON
PONTOTOC
MCCURTAIN
CIMARRON
20-25%
Figure 2. Percentage Uninsured by County for All Income
Levels Under 65 Years of Age, 2006
17-20%
25-30%
30-35%
SOURCE: US Census Bureau, 2009
35% and over
State Percentage
Uninsured‐ 21.0%
20.8% 23.3%
17
Demographic Trends for the Fairfax, Hominy, and Newkirk Community Health Centers
Medical Service Area and Osage and Kay Counties
The Fairfax, Hominy, and Newkirk Community Health Centers medical service area is
delineated in Figure 3. The primary medical service area is the immediate area surrounding
these clinics which is most of Kay and Osage Counties. The population for Kay and Osage
counties is delineated in Table 4. Both Kay and Osage Counties experienced an increase in their
population from 1990 to 2000. Kay County only reported a 0.5 percent increase while Osage
County experienced an increase of 6.7 percent. From the years of 2000-2009, Osage County
reported an increase of 1.38 percent, and Kay County had a decrease of 4.1 percent. The state of
Oklahoma experienced an increase of 9.7 percent from 1990-2000 and 5.56 percent from 2000-
2009.
18
City County Hospital
No. of
Beds
Ponca City Kay Ponca City Medical Center 140
Perry Noble Perry Memorial Hospital 26
Fairfax Osage Fairfax Memorial Hospital 15
Pawhuska Osage Pawhuska Hospital, Inc 25
Cleveland Pawnee Cleveland Area Hospital 14
Figure 3
Fairfax, Hominy, and Newkirk Community Health Centers Medical
Service Area
Primary Medical Services Area
19
Table 4
Population for Kay County, Osage County, and Oklahoma
1990 2000 2009 % Change % Change
Population Population Population 1990-2000 2000-2009
State of Oklahoma 3,145,585 3,450,654 3,642,361 9.70% 5.56%
Kay County 48,056 48,080 46,110 0.05% -4.10%
Osage County 41,645 44,437 45,051 6.70% 1.38%
SOURCE: Population data from the U.S. Bureau of Census, 1990, 2000; U. S. Bureau of the
Census, Population Estimates Branch, 2009
Tables 5 (a and b) and 6 (a and b) provide further details about the demographic trends
of Osage and Kay Counties. Tables 5a and 5b presents the breakdown by age group for Osage
and Kay Counties and the State of Oklahoma from the census years 1990 and 2000 and the 2008
census estimates. The lowest age group, age 0-14, experienced a decrease from 1990-2000 and
2008 on both the state and county level for both counties. The age group of 45-64, however, has
seen a consistent increase over time. In Osage County, those age 45-64 made up 20.8 percent of
the total population in 1990, and this went up to 25.4 percent in 2008. Kay County also
experienced an increase from 19.5 percent in 1990 to 27.3 percent in 2008. This same trend
holds true for the state of Oklahoma as well.
Tables 6a and 6b shows the race and ethnic group percentages for Osage and Kay
County and the state of Oklahoma for the census years 1990 and 2000 and the 2008 census
estimates. The state has experienced a significant increase in people of Hispanic origin,
increasing from 2.7 percent in 1990 to 7.6 percent in 2008. Osage and Kay Counties have
experienced a similar trend. In 1990, those of Hispanic origin made up 1.6 percent of the Osage
County population and 1.8 percent of the Kay County Population. In 2000, this number
20
increased to 2.1 percent for Osage County and 4.3 percent for Kay. This number again increased
in the 2008 estimates to 2.7 percent for Osage County and 5.9 percent for Kay County.
21
Table 5a
Age Groups -
for Population Numbers and Percent of Total Population
Osage County and the State of Oklahoma
Osage County State of Oklahoma
Age Groups Number Percent Number Percent
1990 Census
0-14 9,609 23.1% 702,537 22.3%
15-19 2,974 7.1% 233,093 7.4%
20-24 2,107 5.1% 222,766 7.1%
25-44 12,585 30.2% 961,560 30.6%
45-64 8,674 20.8% 601,416 19.1%
65+ 5,696 13.7% 424,213 13.5%
Totals 41,645 100.0% 3,145,585 100.0%
2000 Census
0-14 9,523 21.4% 732,907 21.2%
15-19 3,376 7.6% 269,373 7.8%
20-24 2,229 5.0% 247,165 7.2%
25-44 12,205 27.5% 975,169 28.3%
45-64 11,297 25.4% 770,090 22.3%
65+ 5,807 13.1% 455,950 13.2%
Totals 44,437 100.0% 3,450,654 100.0%
2008 Estimates
0-14 8,011 17.6% 753,870 20.7%
15-19 3,135 6.9% 251,880 6.9%
20-24 3,045 6.7% 270,201 7.4%
25-44 11,748 25.8% 957,085 26.3%
45-64 13,417 29.5% 918,688 25.2%
65+ 6,133 13.5% 490,637 13.5%
Totals 45,489 100.0% 3,642,361 100.0%
SOURCE: U.S. Census Bureau, Census data for 1990 and 2000, estimated population for 2008
(www.census.gov [April 2010]).
22
Table 5b
Age Groups -
for Population Numbers and Percent of Total Population
Kay County and the State of Oklahoma
Kay County State of Oklahoma
Age Groups Number Percent Number Percent
1990 Census
0-14 10,780 22.4% 702,537 22.3%
15-19 3,233 6.7% 233,093 7.4%
20-24 2,597 5.4% 222,766 7.1%
25-44 13,700 28.5% 961,560 30.6%
45-64 9,354 19.5% 601,416 19.1%
65+ 8,392 17.5% 424,213 13.5%
Totals 48,056 100.0% 3,145,585 100.0%
2000 Census
0-14 10,360 21.5% 732,907 21.2%
15-19 3,872 8.1% 269,373 7.8%
20-24 2,702 5.6% 247,165 7.2%
25-44 12,034 25.0% 975,169 28.3%
45-64 10,958 22.8% 770,090 22.3%
65+ 8,154 17.0% 455,950 13.2%
Totals 48,080 100.0% 3,450,654 100.0%
2008 Estimates
0-14 9,598 21.0% 753,870 20.7%
15-19 3,285 7.2% 251,880 6.9%
20-24 2,782 6.1% 270,201 7.4%
25-44 10,020 22.0% 957,085 26.3%
45-64 12,464 27.3% 918,688 25.2%
65+ 7,483 16.4% 490,637 13.5%
Totals 45,632 100.0% 3,642,361 100.0%
SOURCE: U.S. Census Bureau, Census data for 1990 and 2000, estimated population for 2008
(www.census.gov [April 2010]).
23
Table 6a
Race and Ethnic Groups -
for Population Numbers and Percent of Total Population
Osage County and the State of Oklahoma
Osage County State of Oklahoma
Race/Ethnic Groups Number Percent Number Percent
1990 Census
White 30,703 73.7% 2,583,512 82.1%
Black 4,148 10.0% 233,801 7.4%
Native American 1 6,054 14.5% 252,420 8.0%
Other 2 80 0.2% 75,852 2.4%
Two or more Races 3 n/a n/a n/a n/a
Hispanic Origin 4 660 1.6% 86,160 2.7%
2000 Census
White 29,380 66.1% 2,721,554 78.9%
Black 4,773 10.7% 264,235 7.7%
Native American 1 6,299 14.2% 275,558 8.0%
Other 2 129 0.3% 50,686 1.5%
Two or more Races 3 2,916 6.6% 138,621 4.0%
Hispanic Origin 4 940 2.1% 179,304 5.2%
2008 Estimates
White 29,899 65.7% 2,600,115 71.4%
Black 4,827 10.6% 280,290 7.7%
Native American 1 6,318 13.9% 278,659 7.7%
Other 2 212 0.5% 63,856 1.8%
Two or more Races 3 3,021 6.6% 140,821 3.9%
Hispanic Origin 4 1,212 2.7% 278,620 7.6%
SOURCE: U.S. Census Bureau, Census data for 1990 and 2000, estimated population for 2008 (www.census.gov [April
2010]).
1 Native American includes American Indians and Alaska Natives.
2 Other is defined as Asian Americans, Native Hawaiians, Pacific Islanders and all others.
3 Two or more races indicate a person is included in more than one race group.
4 Hispanic population is not a race group but rather a description of ethnic origin; Hispanics are included in the five race
groups.
n/a - Not available; 1990 census did not report this category
24
Table 6b
Race and Ethnic Groups -
for Population Numbers and Percent of Total Population
Kay County and the State of Oklahoma
Kay County State of Oklahoma
Race/Ethnic Groups Number Percent Number Percent
1990 Census
White 42,552 88.5% 2,583,512 82.1%
Black 854 1.8% 233,801 7.4%
Native American 1 3,555 7.4% 252,420 8.0%
Other 2 244 0.5% 75,852 2.4%
Two or more Races 3 n/a n/a n/a n/a
Hispanic Origin 4 851 1.8% 86,160 2.7%
2000 Census
White 39,687 82.5% 2,721,554 78.9%
Black 850 1.8% 264,235 7.7%
Native American 1 3,504 7.3% 275,558 8.0%
Other 2 273 0.6% 50,686 1.5%
Two or more Races 3 1,721 3.6% 138,621 4.0%
Hispanic Origin 4 2,045 4.3% 179,304 5.2%
2008 Estimates
White 36,247 79.4% 2,600,115 71.4%
Black 892 2.0% 280,290 7.7%
Native American 1 3,695 8.1% 278,659 7.7%
Other 2 333 0.7% 63,856 1.8%
Two or more Races 3 1,784 3.9% 140,821 3.9%
Hispanic Origin 4 2,681 5.9% 278,620 7.6%
SOURCE: U.S. Census Bureau, Census data for 1990 and 2000, estimated population for 2008 (www.census.gov [April
2010]).
1 Native American includes American Indians and Alaska Natives.
2 Other is defined as Asian Americans, Native Hawaiians, Pacific Islanders and all others.
3 Two or more races indicate a person is included in more than one race group.
4 Hispanic population is not a race group but rather a description of ethnic origin; Hispanics are included in the five race
groups.
n/a - Not available; 1990 census did not report this category
25
The Direct Economic Activities
The health sector creates employment and payroll impacts, which are important direct
economic activities for the Fairfax, Hominy, and Newkirk Community Health Centers service
area. The health sector is typically divided into the following six components:
• Hospital
• Physicians, Dentists, and Other Medical Professionals
• Nursing and Protective Care
• Home Health
• Pharmacies
• Other Medical and Health Services
For the purpose of this report, only the community health centers will be examined.
Therefore, all three will be represented in the Physicians, Dentists, and Other Medical
Professionals sector. The total of the three clinics employs 47 FTEs with a total direct payroll of
$1,714,075.
The Fairfax Clinic that opened January 1, 2006, employs 28 FTEs with an annual payroll
of $1,191,005. Hominy’s Clinic that opened in May of 2007 employs 11 FTEs with an annual
payroll of $345,410. The Newkirk Clinic is the newest clinic, opening in July 2009. This clinic
employs 8 FTEs with an annual payroll of $177,660.
The health sector is vitally important as both a community employer and a source of
income to the community's economy. As demonstrated in Table 7, the health sector employs a
large number of residents. These residents, along with businesses in the health sector, purchase a
large amount of goods and services from businesses in the Fairfax, Hominy, and Newkirk
Community Health Centers medical service area. These impacts are referred to as secondary
impacts or benefits to the economy. Before the secondary impacts of the health sector are
discussed, the basic concepts of community economics will be reviewed.
26
Table 7
Direct Economic Activities of the Health Sector
in the Fairfax, Hominy, and Newkirk Community Health Centers Medical Service Area
Component Full-Time & Part-
Time Employment
Total Payroll with
Benefits
Fairfax Clinic 28 $1,191,005
Includes one DO, one PA, one Dentist one
Psychiatrist, and one Psychologist
Hominy Clinic
Includes one DO, one PA, and one CMW/ARNP 11 $345,410
Newkirk Clinic 8 $177,660
Includes one DO and one ARNP
Totals 47 $1,714,075
SOURCE: Local survey and estimates from research.
27
Basic Concepts of Community Economics and
Income and Employment Multipliers
Figure 3 illustrates the major flows of goods, services, and dollars of any economy. The
foundations of a community's economy are those businesses that sell some or all of their goods
and services to buyers outside of the community. Such a business is a basic industry. The two
arrows in the upper right portion of
Figure 3 represent the flow of products
out of, and dollars into, a community. To
produce these goods and services for
"export" outside the community, the
basic industry purchases inputs from
outside of the community (upper left
portion of Figure 3), labor from the
residents or "households" of the
community (left side of Figure 3), and
inputs from service industries located
within the community (right side of
Figure 3). Households using their
earnings to purchase goods and services from the community’s service industries complete the
flow of labor, goods, and services in the community (bottom of Figure 3). It is evident from the
relationships illustrated in Figure 3 that a change in any one segment of a community's economy
will cause reverberations throughout the entire economic system of the community.
Households
Industry
Basic
Services
Goods &
$
Labor Inputs
Products
Inputs
$ $
$
$
Services
$ Figure 3 $
Community Economic System
28
Consider, for instance, the closing of a hospital. The services section will no longer pay
employees and the dollars flowing into households from these jobs will stop. Likewise, the
hospital will not purchase goods from other businesses, and the dollar flow to other businesses
will stop. This decreases income in the "households" segment of the economy. Since earnings
would decrease, households decrease their purchases of goods and services from businesses
within the "services" segment of the economy. This, in turn, decreases the amount of labor and
input that these businesses' purchase. Thus, the change in the economic base works its way
throughout the entire local economy. The total impact of a change in the economy consists of
direct, indirect, and induced impacts. Direct impacts are the changes in the activities of the
impacting industry, such as the closing of a hospital. The impacting business, such as the
hospital, changes its purchase of inputs as a result of the direct impact. This produces an indirect
impact in the business sectors.
Both the direct and indirect impacts change the flow of dollars to the community's
households. The households alter their consumption accordingly. The effect of this change in
household consumption upon businesses in a community is referred to as an induced impact. A
measure is needed that yields the effects created by an increase or decrease in economic activity.
In economics, this measure is called the multiplier effect. The multipliers used in this report are
defined as:
“…the ratio between direct employment (or income), or that employment (or income)
used by the industry initially experiencing a change in final demand and the direct,
indirect, and induced employment (or income).”
An employment multiplier of 3.0 indicates that if one job is created by a new industry,
2.0 jobs are created in other sectors due to business (indirect) and household (induced) spending.
29
Secondary Impacts of the Health Sector
on the Economy of Fairfax, Hominy, and Newkirk Community Health Centers
Employment and income multipliers for the area have been calculated by use of the
IMPLAN model. This model was developed by the U.S. Forest Service1 and allows for the
development of multipliers for various sectors of an economy. The employment multipliers for
the components of the health sector are shown in Table 8, column 3. The employment multiplier
for the Physicians, Dentists, and Other Medical Professionals component is 1.33 for Osage
County and 1.45 for Kay County. This indicates that for each job in that component, an
additional 0.33 jobs are created throughout the area due to business (indirect) and household
(induced) spending in Osage County. Similarly, each job associated with the CHC creates and
additional 0.45 jobs in Kay County. The employment multipliers for the other health sector
components are also shown in Table 8, column 3.
Applying the employment multipliers to the employment for each component yields an
estimate of the impact on the economy (Table 8, columns 2, 3, and 4). For example, the
component of Physicians, Dentists, and Other Medical Professionals for the Fairfax Clinic has a
direct employment of 28 full-time and part-time employees; applying the employment multiplier
of 1.33 to the employment number of 28 brings the total employment impact of the hospital to 37
employees. The same method is used for the Hominy clinic where a total impact of 15
employees is observed after applying the multiplier of 1.33 to the direct number of 11
employees. The Newkirk Clinic follows the same method; however, the multiplier of 1.45 is
used for Kay County. Therefore, the total employment impact for the Newkirk Clinic is 12
employees. The total employment impact of the health sector in Fairfax, Hominy, and Newkirk
1 For complete details of model, see [1], [2], and [3].
30
Community Health Centers medical service area is estimated to be 63 employees (Table 8, total
of column 4).
31
Table 8
Fairfax, Hominy, and Newkirk Community Health Centers Medical Service Area Health Sector Impact
on Employment and Income, and Retail Sales and Sales Tax
(1) (2) (3) (4) (5) (6) (7) (8) (9)
Employment Income Retail 1 Cent
Health Sectors Employed Multiplier Impact Income Multiplier Impact Sales
Sales
Tax
Fairfax Clinic1 28 1.33 37 $1,191,005 1.13 $1,342,263 $154,629* $1,546*
Hominy Clinic1 11 1.33 15 $345,410 1.13 $389,277 $44,845* $448*
Newkirk Clinic1 8 1.45 12 $177,660 1.27 $225,095 $66,426* $664*
Total 47 63 $1,714,075 $1,956,635 $265,899* $2,659*
SOURCE: 2008 IMPLAN database, Minnesota IMPLAN Group, Inc.; Local data for employment, employee compensation and proprietor's income; income estimated
based on state average incomes if local data not available
1 Multipliers for the Physicians, Dentists, and Other Medical Professionals Component were used.
* Based on the ratio between Osage County retail sales and income (11.52%) and Kay County retail sales and income (29.51%) – from 2009 County Sales Tax Data and
2007 Personal Income Estimates from the Bureau of Economic Analysis.
32
Applying the income multipliers to the income (payroll including benefits) for each of the
health sector components yields an estimate of each component’s income impact on the Fairfax,
Hominy and Newkirk Community Health Centers medical service area (Table 8, columns 5, 6,
and 7). The income multiplier for the Physicians, Dentists, and Other Medical Professionals
component is 1.13 for Osage County and 1.27 for Kay County (Table 8, column 6). This
indicates that for each dollar in that component, an additional 0.13 dollars are created throughout
the area due to business (indirect) and household (induced) spending in Osage County. Also,
each dollar spent for salary payments to CHC employees in Kay County generates another 27
cents throughout the economy. The Fairfax Clinic has a total income impact of $1,342,263 after
applying the multiplier of 1.13 to the direct payroll of $1,191,005. The Hominy Clinic has a
total income impact of $389,277 after the proper multiplier is applied. The Newkirk Clinic has a
total income impact of $225,095 after the Kay County Physicians, Dentists, and Other Medical
Professionals multiplier of 1.27 is applied to the direct payroll of $177,660. The total income
impact of the health sector on the economy of Fairfax, Hominy, and Newkirk Community Health
Centers medical service area is projected to be $1,956,635 (Table 8, total of column 7).
Income also has an impact on retail sales, and CHCs in this report have their own distinct
effect on these retail sales. The local retail sales capture ratio is used to estimate the effect of the
health sector on retail sales. This ratio indicates the percentage of personal income spent locally
on items that generate local sales tax. If the county ratio between retail sales and income
continues as it has in the past several years (around 11.52 percent for Osage County and 29.51
percent for Kay County), then direct and secondary retail sales generated by the CHCs equals
$265,899 (Table 8, total of column 8). Each of the components’ income impacts is utilized to
determine the retail sales and a one-cent sales tax collection for each component. A one-cent
sales tax collection is estimated to generate $2,659 in the Fairfax, Hominy, and Newkirk
Community Health Centers medical service area economy as a result of the health sector income
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impact (Table 8, total of column 9). This estimate is probably low, as many health care
employees tend to spend a larger portion of their income in local establishments that collect sales
tax. The bottom line is that the Fairfax, Hominy, and Newkirk Community Health Centers not
only contributes greatly to the medical health of the community, but also to the economic health
of the community.
Summary
The economic impact on the economy of Fairfax, Hominy, and Newkirk Community
Health Centers is tremendous. The health sector employs a large number of residents, similar to
a large industrial firm. The secondary impact occurring in the community is extremely large and
is a testament to the importance of the health sector. If the health sector increases or decreases in
size, the medical health of the community, as well as the economic health of the community, is
greatly affected. For the attraction of industrial firms, businesses, and retirees, it is crucial that
the area have a quality health sector. The fact that a prosperous health sector also contributes to
the economic health of the community is often overlooked.
References
[1] IMPLAN Professional Version 2.0 Social Accounting & Impact Analysis Software –
USER’S GUIDE, ANALYSIS GUIDE, DATA GUIDE, MIG, Minnesota IMPLAN
Group, 2nd Edition, June 2000.
[2] Palmer, Charles and Eric Siverts, IMPLAN ANALYSIS GUIDE. U.S. Department of
Agriculture, Forest Service Land Management Planning Systems Section, Rocky
Mountain Forest and Range Experiment Station, Fort Collins, Colorado, 1985.
34
[3] Siverts, Eric, Charles Palmer, Ken Walters, and Greg Alward, IMPLAN USER'S
GUIDE, U.S. Department of Agriculture, Forest Service, Systems Application Unit, Land
Management Planning, Fort Collins, Colorado, 1983.